Greenhouse gases: Greenhouse Gas Reduction Fund: studies.

Senators Limón and McGuire, with Assembly Members Irwin and Rivas as coauthors, present this measure as a comprehensive reconfiguration of California’s greenhouse gas governance, tying funding decisions to a set of dedicated programs and creating new legislative advisory mechanisms to accompany climate policy oversight. The measure seeks to realign proceeds from the state’s greenhouse gas reduction financing toward defined funds for clean transportation, housing and community investment, clean air and water, wildfire prevention and resilience, agriculture, clean energy, and climate-focused innovation, while embedding new study and review requirements and establishing an immediate effect through an urgency clause.

A new offset-focused framework requires the state board to study offsets and report to the Legislature by December 31, 2026 on several technical questions, including the contribution of offset projects to climate goals, potential changes to the state’s “direct environmental benefits in the state” definition, and the attractiveness of in-state offset development. The measure directs the board to recommend alternative valuation methodologies for in-state offsets and to consider offset protocols used in other carbon markets, including international references. This offset-related work would become inoperative after December 31, 2030. In addition, the board must update all existing compliance offset protocols by January 1, 2029 to reflect best available science, and every five years thereafter, beginning January 1, 2034, to reassess the protocols’ alignment with scientific developments.

The measure adds an intent statement directing specific percentages of fund revenues to separate, multi-year spending plans for dedicated programs, covering clean transportation, housing and community investment, clean air and water, wildfire prevention and resilience, agriculture, clean energy, and climate-focused innovation. It also calls for appropriations from these funds to be guided by fund-specific, multiyear plans. Beginning in the 2026–27 fiscal year, after these dedicated allocations are fulfilled, remaining fund moneys are proposed to be continuously appropriated to a set of core programs, including major capital and infrastructure initiatives, with detailed allocations to support transit, rail, housing programs, air quality protections, forestry and fire programs, and drinking water improvements. Notably, the measure contemplates substantial new allocations to high‑speed rail’s initial operating segment and related design and environmental costs, along with allocations to transit passes, a UC climate research center seed fund, Topanga Park rebuilding, and a climate-focused innovation entity, all within a stated reserved or targeted framework for the 2026–27 fiscal year.

In terms of governance and funding mechanics, the measure would render the current continuous appropriations for transit, affordable housing, sustainable communities, high‑speed rail, and related programs inoperative after mid‑2026, transitioning to the new priority-based structure pending final Department of Finance determinations. It also codifies a schedule of specific, large-scale disbursements beginning in the mid-2020s, including a substantial allocation to the High-Speed Rail Authority for project components, and sets aside funds for a Legislative Counsel Climate Bureau to provide advisory and investigative services to climate policy committees. The measure thus embeds both a reallocation framework and an oversight mechanism intended to align funding with stated climate objectives while introducing a timeline for implementation and review.